Thursday, May 28, 2009

Coal Giant Looking to Wind in Wyoming? (BTU)

From the St. Louis Post-Dispatch:

Thousands of tons of coal a day flow from Peabody Energy Corp.'s three Powder River Basin mining complexes in northeastern Wyoming to power plants across the country.

But the sprawling mines aren't just major sources of power plant fuel. The mammoth shovels, drag lines and conveyors used to scrape away earth and transport coal to rail cars are also big electricity users.

Like other businesses, the mining industry is constantly searching for ways to reduce energy costs. For Peabody, the world's largest private sector coal producer, that quest has executives considering an unlikely option — wind.

"We are evaluating whether or not one or several wind turbines may be helpful in supplementing the power supply," said Vic Svec, a Peabody vice president. He added that Peabody was still in the early stages of its analysis and couldn't say how many turbines it was considering or when a decision would be made.

Peabody is quick to note that it already benefits from low-cost electricity in Wyoming, fueled mostly by home-grown coal. But the company is also keenly aware of the state's wind resources and is looking for ways to reduce its energy costs, Svec said.

For instance, Peabody already installed miles of conveyors to move coal to train loading facilities — a move that will take huge trucks off of haul roads and save the company millions of gallons of diesel fuel.

Wyoming, which is easily the nation's largest coal producer, also ranks No. 7 in the nation in wind energy potential, according to a Department of Energy study. And wind energy development in the state is rapidly expanding....MORE

Over the last year BTU has almost exactly matched the PowerShares WilderHill Clean Energy ETF (PBW), while both have trailed the S&P 500 (^GSPC) of which BTU is a component. Chart via Yahoo Finance: